Today, I want to focus on LOGISTICS! Wow, I have to thank my wonderful Husband for his persistence and patience in dealing with the shipping/logistics of getting our heated chairs here in Illinois. From our Manufacturing blog, we have two manufacturing facilities. One is in Ningbo, China and the other is in Kaiping, Guangdong. The all-season heated chair assembly is in Ningbo and the powerpacks and chargers for the chair’s heating system are in Kaiping.
The first action you should take when dealing with international shipping is find a trusted Freight Forwarder. This person is responsible, as a 3rd party, in organizing and arranging shipments. They will help you with communication between you and your manufacturers. Please ask for references and then call them! You will start with asking questions about US Customs/import process, logistical acronyms, transportation process and expectations. Don’t hesitate to ask them anything you don’t understand. Logistics is typically new to all of us starting this process! Then you will want estimated container costs, duty fees, entry bonds (ask about continuous bond) and any additional fees that may apply. Duty is calculated as a percentage of the commercial value (Cost) of the goods being imported and the cost of transportation (Freight). This is called CIF value. If you pay $15,000 for the product and freight costs $3,000 you would pay duty on $18,000. In this process if you do not have a warehouse lined up, please work with your Freight Forwarder on this. One line of caution if you are using multiple manufacturers—Sales Tax of 17% may apply if you are shipping from one mfg. location to another. Please ask these questions at the beginning so you don’t run into problems at the end. There are alternatives so please ask your Forwarders.
Another thing to keep in mind with logistics is you will need to assign item numbers or a sku for your products to help identify the items once they make it to warehousing. Keep great records of the numbers you assign to your products to prevent confusion later on. You will need to know how the product/s will be shipped in the container. Will they need palletized, packaged, etc? You will need a Bill of Lading and signed Custom Power Of Attorney(make sure you fill out EVERYTHING). One more thing I will add, make sure your manufacturers take pictures of your final product in their shipping packages or pallets. Make sure they are protected for the ride to their final destination may be a rough one.
The best advice I can give when dealing with logistics and your Freight Forwarder is to educate yourself, stay confident and be persistent! The next Chaheati Journey Blog will discuss the beginning of the Sales and Marketing phase.